Vietnam Experiences: Trade Facilitation and Economic Development Nguyen Thang, Center for Economic Analysis and Forecast, Vietnam Academy of Social Sciences, Vietnam 6/8/2009 1
Outline Vietnamese economy at a glance Trade Facilitation: Overview of Vietnam experiences Lessons learnt 6/8/2009 2
Vietnamese economy at a glance Indicator Unit 2003 2004 2005 2006 2007 2008 Average for the pre-wto accession period 2003-2006 GDP growth rate (1) (2) (3) (4) (5) (6) (7) (8) (9) % 7.3 7.8 8.4 8.2 8.5 6.4 7.9 Inflation (CPI) % 3 9.5 8.4 6.6 12.6 21.3 6.9 Export USD mil. 20,149 26,485 32,447 39,826 48,561 64,880 29,727 Import USD mil. 25,255 31,969 36,761 44,891 62,680 80,890 34,719 FDI committed USD mil. 3,191 4,548 6,840 12,004 21,300 64,000 6,6 FDI disbursed USD mil. 2,650 2,852 3,308 3,956 8,050 12,000 3,192 6/8/2009 3
Vietnam Trade Facilitation experiences Policy making level Although improving, there is a big gap Implementation level An even bigger gap 6/8/2009 4
TF - Policy making level Vietnam trade expansion policy Joining WTO; Reducing trade barriers via international conventions, regional treaties and bilateral trade agreements, free trade agreements; Trade facilitation under multi-level international commitments (Trade/Investment/Customs/..etc) Complying with international commitments Modernization policy toward automation operation of various key Trade implementation agencies such as Customs/Tax Offices 6/8/2009 5
TF - Policy making level Some crucial commitments WTO umbrella: GATT Customs Valuation and other Trade related Agreements APEC umbrella: Trade Facilitation Action Plan - TFAP I&II WCO Framework of standards to secure and facilitate global trade Bilateral Trade Facilitation commitments with regional trade partners. 6/8/2009 6
Vietnam TF - implementation level Viet Nam for the first time had a comprehensive programme to realise APEC targets of trade facilitation as well as the reduction of trade costs in 2003. The programme included 96 different actions and measures covering aspects of customs, standards and conformance, e- commerce and business travel. Vietnam Government also promulgates a series of legal documents to implement international commitments including WTO membership obligations on trade and trade related issues 6/8/2009 7
Vietnam TF - implementation level Some significant actions and measures: Harmonization of Tariff Structure with the HS Convention Harmonization of Tariff Structure with the HS Convention Simplification and Harmonization on the Basis of the Kyoto Convention Simplification and Harmonization on the Basis of the Kyoto Convention Harmonize APEC trade data 6/8/2009 8
Vietnam TF - implementation level Some significant actions and measures: Implement Paperless and/or Automation of Trade Paperless and/or Automation of Trade-related Procedures related Procedures Adoption of Standard Electronic format and Harmonized data elements Adoption of Standard Electronic format and Harmonized data elements Adoption of the Principles of the WTO Valuation Agreement Adoption of the Principles of the WTO Valuation Agreement 6/8/2009 9
Vietnam TF - implementation level These actions and measures are reaffirmed through the institutional modernization and capacity building toward a sustainable trade facilitation system in Vietnam: Customs Modernization Project, Taxation Modernization Project, State Bank of Vietnam Modernization Project funded by World Bank. National infrastructure building and upgrading projects funded by the World Bank, ADB, JBIC, Nodic, DFIB, etc. 6/8/2009 10
Vietnam TF - implementation level These actions and measures are reaffirmed through the institutional modernization and capacity building toward a sustainable trade facilitation system in Vietnam: Demonstration projects with US TDSA emanifest Pilot Technical Assistance to Vietnam Customs. Single Window Scheme implementation project. And more.. 6/8/2009 11
Vietnam TF - implementation level Most of the measures/actions yet to be concluded? The deadline 2010 of reducing 5% of trade transaction cost of 2005 is still an unanswered question? 5/12/2009 12
Trade Facilitation Vietnam and other countries Trading Across Borders, Doing Business in 2006* Region or Economy Documents for export (number) Signatures for export (number) Time for export (days) Documents for import (number) Signatures for import (number) Time for import (days) China 6 7 20 11 8 24 Hong Kong, 6 4 13 8 3 16 China Indonesia 7 3 25 10 6 30 Japan 5 3 11 7 3 11 Korea 5 3 12 8 5 12 Malaysia 6 3 20 12 5 22 Philippines 6 5 19 8 7 22 Singapore 5 2 6 6 2 8 Chinese Taipei 8 9 14 8 11 14 Thailand 9 10 23 14 10 25 Vietnam 6 12 35 9 15 36 APEC 6.2 5.3 18.15 9 6.6 20.9 Economies** average *SOURCE: http://www.doingbusiness.org/exploretopics/tradingacrossborders/default.aspx?direction=asc&sort=0
Trade Facilitation in reality - Current story In Vietnam national TV May-12-2009: Saigon Sea Port has officially apologized for the loss of shipper/goods owners due to the Port s inefficient loading and discharging services The Saigon Port Authority recommends the shipper and goods owners to redirect the shipments to the other ports (In the South of Vietnam Saigon port is the most convenient one) due to the port limited capacity. 6/8/2009 14
Trade Facilitation in reality - Current story International observers -Policy Research Note by John S. Wilson and Ben Taylor they reference that on average, the ASEAN members require 32 days and 11 documents for an import transaction, compared with 12 days and 6 documents for the average OECD country. 6/8/2009 15
Tentative Diagnostics Trade facilitation seems perceived as obligations/compliance to international commitments rather than a should do/a good thing to do to Vietnam government/public/private sectors. 6/8/2009 16
Tentative Diagnostics In Vietnam, trade facilitation is mainly associated with the process of Customs modernization which is being carried out. Other aspects of trade facilitation such as port efficiency, regulatory environment, and ICT are inadequately covered. 6/8/2009 17
Tentative Diagnostics There is much room to reduce trade transaction cost in Vietnam at every stages: Customs Port clearance/efficiency Transport and IT infrastructures Other regulatory reforms 6/8/2009 18
Lessons Learnt Need to change The mindset (from compliance to developement approach) The attitude (from passive/responsive to active/proactive one) The coordination (combine top-down and bottom-up) The action plan (Strategic prioritization) Cooperation in technical assistance and capacity building with other regional economies 6/8/2009 19
Lesson Learnt Targeting investments in specific areas to realize TF benefits Enhancing public private partnership in information sharing, policy-making process, infrastructure improvement, human resource development and institutional capacity building and outreach activities. Identifying and addressing most urgent needs and priorities of businesses in movement of goods Building capacity through synergy between key actors - APEC, WTO, regional and bilateral arrangements and other international organizations including the World Bank.
Lessons Learnt What to do from policy/research views: Cost and benefit analysis of TF in Vietnam context Institutional analysis for a sustainable TF Trade Facilitation Measuring For a government/public/private consensus and synergy in TF implementation/monitoring in Vietnam. Thank you for your attention! 6/8/2009 21